OPEC oil ministers today set aside the thorny issue of how much oil each country should produce and considered a plan for voluntary production cuts to halt the slide in the price of oil.
Indonesian Energy Minister Subroto, an influential mediator at OPEC conferences, held private talks to find out if some OPEC members were willing to accept voluntary cutbacks as a stopgap measure to stanch some of the flood of excess crude on world markets.
The proposal envisions a cut in OPEC's total production of between 2 million and 3 million barrels a day from its current level of about 20 million barrels a day, OPEC officials said.
The threat of even a temporary production cut sent oil prices climbing in New York. Light sweet crude was up 34 cents a barrel to $11.41 on the New York Mercantile Exchange.
Analysts said the higher prices were more "symptomatic of the condition of the crude market than an indication that traders believe OPEC will reach an effective agreement to cut production."
Jay Amberg, editor of the Oil Buyers' Guide in Lakewood, N.J., said, "There's no doubt that the report gave the market a psychological boost, but the market is watching who is going to do the cutting."
The intent of the proposed voluntary output cutbacks is, "if not to boost prices, then at least to stop them from falling further," said OPEC spokesman James Audu.
Audu said that no country has yet refused to accept a voluntary output cutback. But he and other officials cautioned that Subroto had not yet met all of the ministers and could not make a complete report to the conference until Wednesday morning's session.
The proposal for production cuts immediately ran into opposition from Iran and Algeria. They called instead on Saudi Arabia and its allies, notably Kuwait and the United Arab Emirates, to cut their production before OPEC as a whole considers further measures.
Iranian Petroleum Minister Gholamreza Aghazadeh supported the Algerians and termed the Saudi plea for voluntary cuts "a scam."
It was unclear whether the 13 ministers could agree on such voluntary output reductions. They already have failed three times this year to concur on a more rigid system of quotas.
It was considered possible, however, that a Saudi-led majority might accept some output cuts in hope of stabilizing prices. The Saudis have raised production substantially in recent weeks in an apparent effort to pressure other OPEC members, and they may be willing to reduce their output to avoid contributing further to the glut.
The Saudis had not yet spelled out what they expect from other countries in return for cutting their own production. Saudi Petroleum Minister Ahmed Zaki Yamani said that his country is willing to reduce production, but a well-placed Arab source said the Saudis expect other countries in return to "cooperate" in reducing output.
If OPEC reduces its production by 2 million barrels a day, then the price of oil probably will stop falling at least until early autumn, according to oil industry specialists attending the meeting here as observers.
Some North Sea oil has sold recently for as little as $8.50 a barrel. Eight months ago, the price was more than $30 for the same type of crude.
Delegates of Iran and Algeria said that the plan for voluntary output cuts was a publicity stunt designed to give the impression that the Saudis and their allies were serious about making production cuts.